If you have been creating for a while, someone has probably told you that you should start a business and sell your products. Whether it’s painting, sewing, blogging, or baking, there is likely a market out there for you to turn your hobby into a creative business. But are you ready for that?
As someone who has started multiple small businesses, I can tell you that the road to entrepreneurship is fun and rewarding, but can also be tough. You will have moments where you wonder why you started your business in the first place. Luckily, you will also have moments where you feel elated that you get to do the thing that you love and make money at it.
If you are even a little nervous about starting your own business, check out my FREE PDF Checklist for Starting A Creative Business. Today we are focusing on the Pre-Business Stage and talking about 5 critical questions to ask yourself before you start a creative business.
1. What do you hope to accomplish by starting your business?
An easier way of asking this question is WHY do you want to start a business. Before you push forward into the exciting world of entrepreneurship, you need to clearly understand what your motivations are.
This question is critical because if you don’t know why you are getting started, then you won’t survive when the going gets tough. Simon Sinek talks about this in his book “Start With Why”. He says that companies that build their business around their driving purpose or their “WHY” are overall stronger and more successful than those that don’t.
So take some time to do some soul searching. If the answer you come up with is anything similar to “To make money” then I encourage you to keep searching. Money matters in business, but it should never be the driving force behind what you do and what you create.
Think about the underlying reasons why you make the things that you make and what value you hope to bring to your future customers.
For instance, if you make baked goods, think about how baking makes you feel and what feelings you hope your customers have after eating your delicious cookies. If you are a financial blogger, of course your business will involve talking about money but maybe you want to empower your customers to make savvy financial decisions that will bring them a sense of understanding and control of their lives.
Write down your reasons and keep them in a place where you can go back and look at them later.
These statements will come in very handy when you are pushing through challenges as well as when you are ready to talk to others about your mission statement.
If you want an example of a creative business WHY, you can check out my blog post on my personal site about Why I Became An Artist.
2. How will you measure success?
Once you understand your reasons behind wanting to start a creative business, the next step is to figure out how you will measure success.
Deciding on metrics in advance will help you when it’s time to set goals for your business. It will also help you stay focused on the things that truly matter to you. Every business needs to bring in revenue to keep going, but your revenue goals may differ from someone else’s based on your needs and your WHY. And because this is a relative goal, you may choose to measure the success of your business by other means such as number of customers per month or web page visitors per day. You may even choose to measure your progress by a combination of different metrics.
However you choose to measure your success, make sure this standard aligns with your WHY.
It’s also important to start tracking the metrics for that standard immediately so you can set effective goals and so you know how far you need to go to reach them. If you are unsure of what metrics make sense for your niche, you need to ask yourself question 3.
3. How well do you understand your market?
Every business, big or small, exists in a particular market. A creative business is no different. If you are selling paintings, then you are likely in the artwork market. But it doesn’t stop there. Once you figure out the broad market you will operate in, then you need to narrow down your niche in that market. I will talk more about niching down in another post.
For this step, you only need to niche down by one or two details to begin your research. For instance, in the artwork market you may be an oil painter who specializes in portraits. Understanding your niche will allow you to set realistic expectations for yourself.
Once you decide what market you want to go into, you need to do some research to find out what it takes to be successful in that niche.
Start by figuring out what the cost of operation is for that market versus the expected revenue. Find out what equipment you will need to do business in this market and what your upfront costs are going to be. Use the parameters that you set earlier in question 2 and find out what the industry averages are for these metrics. How long will it take to reach your goals in these metrics?
Taking the time to learn about your market in advance will go a long way in helping you find success on your own entrepreneurial journey.
4. How much time and money are you willing to commit to your business?
Your creative business is going to take some sacrifice on your part. Every business costs money and takes time to operate. If you aren’t careful, these expenses can easily get away from you. Over time, just one more start-up purchase and one more work hour can add up until you find yourself in debt and exhausted with little to show for your efforts. That’s why it is important that you decide in advance how much time and money you will commit to your business.
If all you want is a side-hustle that will bring you in a little extra spending money, then you probably won’t need to commit to as much time and energy as if your goals for your new business are to replace your full-time job.
The time and money that you spend in the beginning will usually compliment each other.
This means more up-front cost for fewer hours of work or more work time for fewer expenses. For instance, you can spend extra money to get free-lancers and other professionals to do some things for you and save you hours of your own time, or you can save money and do all of it yourself which means spending much more of your free time to get things going.
Neither way is wrong or better than the other. But you need to decide in advance what sacrifices you will make so you can keep these metrics in control.
If you find you reach those limits faster than you thought, that’s a sign that it’s time to reevaluate your business.
Perhaps you underestimated the initial costs, or forgot to factor in certain start-up details. If you hit this block, it often means that more market research is necessary to understand everything your business requires. It could also mean that there are gaps in your processes that need to be filled before you can reach your goals.
The only way to prepare yourself to see these gaps when they show up is to set your time and energy limits in advance. It’s okay to reevaluate along the way.
Don’t fall into the trap of quitting halfway through because you didn’t set boundaries for yourself before you started.
5. What more will you need to learn?
There may be some genius out there who was born knowing how to run a successful business, but I have never met him. Running a business is a complicated endeavor. There will be questions that come up along the way that you do not know how to answer. This is normal.
One of the most exciting aspects of entrepreneurship is that there will always be more challenges and learning opportunities. As you do your research, notate the things that you will need to learn more about in order to make your business successful. Do you need to take a seminar on running a business budget? Could you benefit from a course in social media marketing?
Understanding where your gaps are and what you still need to learn is a big part of starting your business off right.
That doesn’t necessarily mean that you should wait to get started. There is no way to know everything about running a business and waiting until you know it “all” will leave you stuck in preparation mode. You won’t make any money or gain any experience in preparation mode. You must get started.
Make a list of the things that you need to learn and assess whether you can start without that knowledge.
For instance, if you want to sell homemade hand soap, but you have never actually made hand soap before, you will probably have to take a class before you can get started on your business. However, if you want to sell handmade jewelry, but you don’t know how to market jewelry on Instagram, that is something you can learn along the way.
Once you have a better understanding of where your information gaps are, either sign yourself up for some training in those areas, or find someone who has that knowledge already and pay them to help you.
Whatever you do, don’t wait longer than you have to. The only way to get out of preparation mode is to start.
Starting a creative business is an exciting endeavor. If you are thinking about turning your hobby into a business, it is probably because you love what you do and you want to share it with others.
Take the time to answer these five questions and get to know the creative business that you plan on starting.
Then take those answers and save them so you can come back to them later. You will need to reference those answers many times along your creative journey. By taking the time to do some soul searching and market research in advance, you are setting yourself up for more creative success.
If you would like more information about starting or running a creative business, check out my other posts on Planning a Creative Business and Starting Your Own Creative Business. What other questions do you have? I would love to help you.